Research highlights impact of rising business costs on UK SMEs
Recent research commissioned by Close Brothers Asset Finance has revealed the significant impact of rising costs on businesses across the UK, with a majority of respondents reporting adverse effects on their operations and financial health.
According to the research, 71% of businesses have been affected by the rising cost of doing business, while 25% reported no impact, and 5% were unsure.
Among those experiencing increased costs, 56% indicated that it has negatively impacted their cash flow. Conversely, 27% reported no negative impact on cash flow, and 15% have not noticed an increase in costs.
The survey also identified the top five primary inflationary cost pressures affecting businesses – in order of most impactful:
- Energy (gas, electricity)
- Supplier costs
- Fuel (petrol, diesel)
- Interest rates
- Rent
Additionally, 67% of businesses have seen their business insurance costs rise in the past 12 months, while 26% have not, and 7% are unsure.
In response to these increased costs, 24% of businesses have passed them on to customers completely, 61% partially, and 15% have not passed on any costs.
Regarding employee wages, 54% of businesses reported wage increases in the past six months, 34% did not, and 6% were unsure.
These findings underscore the challenges faced by UK businesses in the current economic climate, highlighting the need for strategic planning and support to navigate these pressures.
“The rising costs of doing business are presenting significant challenges for many enterprises across the UK,” said Anton Nebbe, Head of PR and Communications, and responsible for commissioning research at the firm.
“Our research highlights the critical areas where businesses are feeling the pinch, from energy and supplier costs to increased insurance premiums.
“At Close Brothers Asset Finance, we are committed to providing the support and resources businesses need to navigate these pressures and continue to thrive. By understanding these challenges, we can better assist our customers in developing strategies to mitigate these impacts and ensure long-term success.”
Methodology
*All figures, unless otherwise stated, are from a Censuswide survey conducted in May 2024. The survey canvassed the opinion of over 900 SME owners across the UK and Ireland and across several industries on a range of issues affecting their businesses
